A very reasonable decision by the administration. Essential patents such as these should be licensed, rather than allow the patent holder to gain a stranglehold on the market by completely banning a competing product.

A very reasonable decision by the administration. Essential patents such as these should be licensed, rather than allow the patent holder to gain a stranglehold on the market by completely banning a competing product.

This is a good decision.

President Obama has finally showed some balls and leadership qualities.

All this anti-FRAND patent enforcement rulings/vetoes coming out is surely going to have a severe negative effect on standards setting that's going on now and in the future - there's basically minimal incentive for patent holders to include their patents in a standard encumbered by FRAND requirements if they can't actually get licensing revenue from it.

All this anti-FRAND patent enforcement rulings/vetoes coming out is surely going to have a severe negative effect on standards setting that's going on now and in the future - there's basically minimal incentive for patent holders to include their patents in a standard encumbered by FRAND requirements if they can't actually get licensing revenue from it.

That doesn't make any sense. A Patent's inclusion in a standard means that the patent holder is guaranteed licensing revenue. However, they are not allowed to hold potential licensees hostage with the patent by refusing to license or demanding unreasonable licensing fees.

Disappointing. The ITC was quite thorough in why they were allowing this ban:

Matt Rizzolo wrote:

As to waiver of exclusionary relief, the Commission found that Apple failed to cite to any case showing that the ITC lacked jurisdiction over cases involving FRAND-pledged SEPs (or where it declined to issue a remedy on a similar basis). The Commission also faulted Apple’s proof of the elements of a contractual defenses (i.e., parties, offer, acceptance, consideration, terms) — let alone the specific contractual obligations that flow from Samsung’s FRAND commitments. Additionally, the Commission found that there were still disputed issues concerning the patent at issue was even actually essential to the standard (and therefore whether a FRAND or disclosure obligation applied at all).

Furthermore, the Commission noted that even if Apple had teed up the FRAND issue properly, it would not have prevailed. The Commission analyzed the history of negotiations between Apple and Samsung (this portion is heavily redacted) to see if Apple showed that Samsung failed to negotiate “in good faith,” and found that Apple failed to do so. Notably, the Commission dismissed Apple’s arguments that (1) Samsung’s initial offer was so high as to show bad faith, and (2) Samsung’s attempts to get a cross-license to Apple’s non-SEPs violated its FRAND commitments. (Note that this type of good faith analysis is what we can expect the upcoming Microsoft-Motorola trial to center around).

The Commission also addressed the public interest vis-a-vis Samsung’s FRAND obligations (see pp. 107-114), and noted that there is no basis in Section 337 for a per se ban on exclusion orders for FRAND-encumbered standard-essential patents. Furthermore, the Commission found that because the FRAND issues had been addressed in the affirmative defense analysis, they should not be revisited as part of the public interest — stating that FRAND affirmative defenses should be treated like all other types of affirmative defenses (e.g., inequitable conduct), which are not revisited as part of the public interest analysis.

tl;dr, the patent might not even be standard-essential, FRAND injunctions are legal, and Apple failed to prove bad-faith negotiation on Samsung's part.

I feel extra-sorry for HTC now, as a matter of fairness. Where was Obama then?

All this anti-FRAND patent enforcement rulings/vetoes coming out is surely going to have a severe negative effect on standards setting that's going on now and in the future - there's basically minimal incentive for patent holders to include their patents in a standard encumbered by FRAND requirements if they can't actually get licensing revenue from it.

That doesn't make any sense. A Patent's inclusion in a standard means that the patent holder is guaranteed licensing revenue. However, they are not allowed to hold potential licensees hostage with the patent by refusing to license or demanding unreasonable licensing fees.

The theory is that they can get guaranteed licensing revenue, but what's actually been playing out the last few years is that companies like Apple, Microsoft and others are stonewalling about paying licensing fees for these FRAND patents. When someone refuses to pay a licensing fee, then your only recourse is to go to court. The only real enforcement that you can leverage with a patent is to force a product off the market.

If you can't force the product off the market, then there's no reason for the infringing company to pay the licensing fee - they can just keep stalling forever.

If you were a company holding a patent that could be used in a new standard, but knew that you would have to spend many years and a great deal of money to probably not get any licensing out of it, and knew that you could not force an infringing company to pay up by threatening to push their product off the market, would you offer your patent to the standard? Or would you just keep it out of the standard, and be able to have the ability to get an injunction on an infringing product?

From a company decision, not being able to get an injunction on your IP makes the decision pretty clear.

While I'm glad that these patents aren't being upheld, I agree with other commenters here in saying that it's unfortunate this isn't being enforced equally for all of the players in this screwed up patent war. All I can hope for is that if Apple decides to continue the patent war using the ITC, the US won't allow an import ban to block another company.

I hate how most people assume that a company that sues over a FRAND patent is automatically the bad guy. These articles frequently leave out the details of the full issue, like that Samsung tried to negotiate a licensing deal and Apple refused. What else is Samsung supposed to do if Apple refuses to license a FRAND patent?

All this anti-FRAND patent enforcement rulings/vetoes coming out is surely going to have a severe negative effect on standards setting that's going on now and in the future - there's basically minimal incentive for patent holders to include their patents in a standard encumbered by FRAND requirements if they can't actually get licensing revenue from it.

That doesn't make any sense. A Patent's inclusion in a standard means that the patent holder is guaranteed licensing revenue. However, they are not allowed to hold potential licensees hostage with the patent by refusing to license or demanding unreasonable licensing fees.

The theory is that they can get guaranteed licensing revenue, but what's actually been playing out the last few years is that companies like Apple, Microsoft and others are stonewalling about paying licensing fees for these FRAND patents. When someone refuses to pay a licensing fee, then your only recourse is to go to court. The only real enforcement that you can leverage with a patent is to force a product off the market.

If you can't force the product off the market, then there's no reason for the infringing company to pay the licensing fee - they can just keep stalling forever.

If you were a company holding a patent that could be used in a new standard, but knew that you would have to spend many years and a great deal of money to probably not get any licensing out of it, and knew that you could not force an infringing company to pay up by threatening to push their product off the market, would you offer your patent to the standard? Or would you just keep it out of the standard, and be able to have the ability to get an injunction on an infringing product?

From a company decision, not being able to get an injunction on your IP makes the decision pretty clear.

This is not correct - courts can (and do) award damages for patent infringement (hello Apple vs Samsung for example). It's not injunction or nothing.

The *time* taken to do so is a problem, but I'm not really sure what you can do about that without dedicating half the US to staffing courts.

All this anti-FRAND patent enforcement rulings/vetoes coming out is surely going to have a severe negative effect on standards setting that's going on now and in the future - there's basically minimal incentive for patent holders to include their patents in a standard encumbered by FRAND requirements if they can't actually get licensing revenue from it.

That doesn't make any sense. A Patent's inclusion in a standard means that the patent holder is guaranteed licensing revenue. However, they are not allowed to hold potential licensees hostage with the patent by refusing to license or demanding unreasonable licensing fees.

All this anti-FRAND patent enforcement rulings/vetoes coming out is surely going to have a severe negative effect on standards setting that's going on now and in the future - there's basically minimal incentive for patent holders to include their patents in a standard encumbered by FRAND requirements if they can't actually get licensing revenue from it.

That doesn't make any sense. A Patent's inclusion in a standard means that the patent holder is guaranteed licensing revenue. However, they are not allowed to hold potential licensees hostage with the patent by refusing to license or demanding unreasonable licensing fees.

The theory is that they can get guaranteed licensing revenue, but what's actually been playing out the last few years is that companies like Apple, Microsoft and others are stonewalling about paying licensing fees for these FRAND patents...

If you were a company holding a patent that could be used in a new standard...

If I were such a company, I would not look at a product that implements over 200 different standards-essential patents and conclude that my standards-essential patent is worth the same as or more than the all the others put together. I would also not claim that I deserve royalties from an OEM, having already received a royalty from the chip supplier to the OEM. I would also not claim that the blanket license I am offering is valid for everyone except Apple.

In other words, decisions about patents that are part of industry-wide standards must be weighed as affecting US economic concerns, beyond simply weighing a company's right to make money off that patent.

My reading was that the USTR felt the ITC placed insufficient attention to the power that a Standards-Essential patent has in being anti-competitive.

I haven't seen any claim that the patent-holders are to be stripped of the fair value of their work, merely that by incorporating it into a standard, they are committing what would otherwise be a monopolization of a technology by a cabal. Of course, single companies are welcome to come up with a patent that gives themselves a monopoly, but conspiring with others to limit non-consortium members' access becomes illegal. The SEP rules are designed to allow collaboration without triggering standard anti-competitive concerns.

This logic seems sound. It seems that the ITC decision focused on whether Apple appropriately demonstrated its position w.r.t. the Samsung patents—its efforts to license them on FRAND terms, that Samsung was obliged to offer them as FRAND—not whether it was good policy to enjoin sales based on FRAND as easily as the court did.

Abuse of standards patents—blocking competitors from licensing the patents—goes back at least 20 years, and people thought the FRAND approach would at least restrain the abuses. The USTR seems to be refining this approach further. Seems like progress.

EU and South Korea should retaliate against Apple and the US administration for this.

What does the EU have anything to do with a US organization having their decision overrode on an issue between a US and South Korean company?

The US is being protectionist, this usually leads to protectionist countermoves.

Exactly. Does anyone believe that if Apple was a non US company it would have received the same treatment - the equivalent of a Presidential pardon? Once it becomes obvious to foreign nations that the US patent regime is biased to favour US corporations at the expense of their own, what motivation will they have to continue supporting the existing patent regime?

All this anti-FRAND patent enforcement rulings/vetoes coming out is surely going to have a severe negative effect on standards setting that's going on now and in the future - there's basically minimal incentive for patent holders to include their patents in a standard encumbered by FRAND requirements if they can't actually get licensing revenue from it.

They can get licensing revenue.

They just can't expect the other party will sign a joint patent license allowing both companies to use all of each other's patents, including non-frand ones.

Apple is happy to give samsung a truck load of money, They do it all the time for other patent holders. But samsung doesn't want money, they want a license to all of apple's non-FRAND patents.

The US is being protectionist, this usually leads to protectionist countermoves.

Exactly. Does anyone believe that if Apple was a non US company it would have received the same treatment - the equivalent of a Presidential pardon? Once it becomes obvious to foreign nations that the US patent regime is biased to favour US corporations at the expense of their own, what motivation will they have to continue supporting the existing patent regime?

It is the sworn duty of the US government to protect US interests. That is the *only* thing they ever do.

If you live in another country, seek aid from your own government. Don't expect others to help you out, it's not going to happen.

Also, they're not just protecting Apple. They're also protecting all of Apple's customers inside the US and all of the companies inside the US who do business with Apple. If samsung were in the same shoes, then Obama would have stepped in as well - not to protect samsung but to protect all of the other people inside the US who would be effected by it.

first time since 1980. You will never get me to believe that there was not some undue influence here. The administration has had about a bazillion chances to fix things like this. All to odd when someone with deep pockets and influence in Washington is the first to get an exemption.

So let me get this straight. The consensus on Ars is that patent law needs an overhaul. But if some old Apple products that most people aren't even buying anymore get banned because it is using an industry standard that has been patented then it is justice served? I don't even know who has won what battles so far cause I can only care about rich-people who keep "stealing" each others ideas for so long.

Since when was Samsung some wonderful company run by decent honest people? Anybody or group of people who can build a company to the scale of these 2 companies does so with questionable ethics. All things being equal, they're all morally corrupt. We can debate over the design of hardware and software, but lets not let some legal jerk-off fest ruin our day. Cause they don't care nearly as much about us as some of us seem to care about them.

All this anti-FRAND patent enforcement rulings/vetoes coming out is surely going to have a severe negative effect on standards setting that's going on now and in the future - there's basically minimal incentive for patent holders to include their patents in a standard encumbered by FRAND requirements if they can't actually get licensing revenue from it.

That doesn't make any sense. A Patent's inclusion in a standard means that the patent holder is guaranteed licensing revenue. However, they are not allowed to hold potential licensees hostage with the patent by refusing to license or demanding unreasonable licensing fees.

This definitely seems like a protectionist move -- this is not the first case where seemingly trivial patents were used to grant an import ban of a tech product recently, and it seems like most of those bans have been against non-US companies. Now when a US company has a ban issued against them, it's vetoed.

While on the face it could be taken as a move to improve the patent system, I would disagree. Inside the US, maybe, but to international companies, this seems to indicate that the system is both broken and plays favorites (with US firms). It will be interesting to see how international tech firms will react. (Though maybe I'm just too skeptical these days.)

A very reasonable decision by the administration. Essential patents such as these should be licensed, rather than allow the patent holder to gain a stranglehold on the market by completely banning a competing product.

Then shouldn't Apple license it? This is just like with Motorola. They didn't license the patent, and didn't try to license it, and used the courts to force the price down, all the while selling products using the patent illegally.

Why license it at all now? There will be no ban on selling the product, so just delay indefinitely. Apple's already shown it will cheat whoever it has to for a profit (like the American Consumer on ebooks).

I'm fairly certain the patent can be licensed and Apple just refused to do so.

All this anti-FRAND patent enforcement rulings/vetoes coming out is surely going to have a severe negative effect on standards setting that's going on now and in the future - there's basically minimal incentive for patent holders to include their patents in a standard encumbered by FRAND requirements if they can't actually get licensing revenue from it.

They can get licensing revenue.

They just can't expect the other party will sign a joint patent license allowing both companies to use all of each other's patents, including non-frand ones.

Apple is happy to give samsung a truck load of money, They do it all the time for other patent holders. But samsung doesn't want money, they want a license to all of apple's non-FRAND patents.

You mean like the Motorola patents they refused to license or pay for?

History sides against you on this one; Apple steals technology all the time and refuses to pay licensing fees.

All this anti-FRAND patent enforcement rulings/vetoes coming out is surely going to have a severe negative effect on standards setting that's going on now and in the future - there's basically minimal incentive for patent holders to include their patents in a standard encumbered by FRAND requirements if they can't actually get licensing revenue from it.

Agreed. Standards bodies are going to have a harder and harder time because all of the previous patent holders like Motorola and Samsung and others won't let them use their patents in future standards, because companies like Apple and Microsoft refuse to pay licensing fees and the US government protects them rather than making them play the same game.

I can say one thing, work on standards is going to be a lot harder in future.

Why?

This presidential veto takes away a lot of the worth of FRAND patents as the licensing negotations will become a lot longer and harder. There is no longer a stick to push the licenser to end talks quick but to drag out them, trying to get the price as low as possible, until the patent owners patience runs out. And then be sued. That is about a decade of no revenue to inventor, possibly bankrupting them.

So why standard work becomes harder? Part of standards work is the promise to license any patents the companies working on standard as FRAND. Companies not working on patent have no such obligation, so now it is much more profitable not to work on future standards, and when one surfaces dig gold with the non FRAND patents the standard needs.

[PJ: Actually, the ITC said it was Apple that was guilty of "reverse hold-up", and the letter clearly stated that it was not commenting on the ITC rulings on the facts. It just didn't want the economy to tank.] - /Edit

All this anti-FRAND patent enforcement rulings/vetoes coming out is surely going to have a severe negative effect on standards setting that's going on now and in the future - there's basically minimal incentive for patent holders to include their patents in a standard encumbered by FRAND requirements if they can't actually get licensing revenue from it.

That doesn't make any sense. A Patent's inclusion in a standard means that the patent holder is guaranteed licensing revenue. However, they are not allowed to hold potential licensees hostage with the patent by refusing to license or demanding unreasonable licensing fees.

The theory is that they can get guaranteed licensing revenue, but what's actually been playing out the last few years is that companies like Apple, Microsoft and others are stonewalling about paying licensing fees for these FRAND patents. When someone refuses to pay a licensing fee, then your only recourse is to go to court. The only real enforcement that you can leverage with a patent is to force a product off the market.

What pure baloney. A plaintiff can ALWAYS get a court to determine the rate and how much is owed and force an infringer to pay up. Injunctions are only supposed to be for situations where money alone can not provide equitable relief, such as for a loss of market share, good will, or reputation, none of which apply to FRAND encumbered patents.